Fedspeak, otherwise known as “purposeful obfuscation”

I’ve been working with several teams of economists lately and it’s got me wondering where they learn to write like that. If you’re lucky enough to have encountered anything penned by an economist, you’ll be familiar with their style: a sort of faux academic-ese in which opacity is deemed an acceptable way to hedge one’s argument.

The people reading this stuff include investors wanting to know where to put their money and senior executives seeking a steer on their business strategy. So why are these unfortunate readers so often presented with reams of impenetrable wordage that leaves them none the wiser?

And then it dawned on me. Most economists are merely aping (and who can blame them?) the language of the guy with the top job in the field: the chairman of the Federal Reserve. Known as “Fedspeak”, this style was invented by former chairman Alan Greenspan and has been enthusiastically adopted by his successor, Ben Bernanke.

The purpose of talking in Fedspeak is to say lots and lots without saying anything at all, because investors hang on your every word. Say something they actually understand and you might spook or delight the markets into moving one way or the other. Often, different newspapers would report the same Greenspan speech with completely opposite interpretations – which is exactly as he wanted it.

Greenspan is quite happy to acknowledge his fondness for convoluted prose: famously, he once replied to a US senator who claimed to have understood him that “in that case, I must have misspoken”. Check out these videos of him talking openly about his tendency for “purposeful obfuscation” and “syntax destruction”.

I think it was the Hari Seldon character in Asimov’s Foundation trilogy that devised a way of analysing a speech, picking out the negatives that cancelled the positives, until he got to the kernel of what was being said. Which was usually nothing.

We aren’t so blessed, so we have to do our best, but the great thing about economese is that they can always say they told us so even when they haven’t.

That’s exactly what Gillian Tett says (she’s the FT journalist who exposed the dangers of all those MTA – Miscellaneous Toxic Assets – before anyone else did). Actually, I think she has said you could count on the fingers of one hand the number of people who ever understood them.